Hong Kong’s securities industry posted further growth in total net profits for the six months ended 30 June 2024 amidst higher average daily market turnover and increases in the number of active cash and margin clients, according to the financial review of the securities industry issued today by the Securities and Futures Commission (SFC).
During the first half of 2024, the total net profits of all securities dealers and securities margin financiers (Note 1) in Hong Kong rose 50% to $19 billion from the preceding six-month period, or up 29% from a year ago. This followed a 25% year-on-year increase in total net profits in 2023. Their total income for the six months ended 30 June 2024 was flat, as the industry’s higher net commission income, underwriting fees and trading profits were offset by lower income from asset management and corporate finance advisory. The reduction in their non-interest overheads was the main driver of the increase in their total net profits.
The financial review report and the latest SFC-HKMA joint survey show that the industry has enhanced the breadth and depth of their product and service offering over time. The financial review report revealed for the first time the industry’s virtual assets dealing activities, generating a total revenue of $77 million for the first half of 2024 (Note 2). Meanwhile, the SFC-HKMA joint survey revealed that the transaction amount of non-exchange traded investment products handled by licensed corporations in 2023 reached a record high of $1,238 billion.
“The 50% half-yearly growth in the industry’s net profits or 95% growth since the second half of 2022 dovetail with our observation that licensed corporations are regaining profitability. Investors remain active as evidenced by the number of active cash and margin clients reaching an all-time high of around 4.87 million. Hong Kong’s securities industry remains robust and resilient, supported by a diversified range of products and services serving global and local investors alike,” said Dr Eric Yip, the SFC’s Executive Director of Intermediaries. “With investor sentiment on the mend, licensed corporations are firming up their foothold in distributing non-exchange-traded investment products, and some are making endeavours in virtual assets dealing.”
The financial review report is available on the SFC website.
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Notes:
Securities dealers and securities margin financiers refer to corporations licensed for dealing in securities or securities margin financing. Both Stock Exchange of Hong Kong Limited (SEHK) participants and non-SEHK participants are included unless otherwise specified. Please refer to Table 1 of the review report for detailed financial data.
Since 1 December 2023, virtual asset trading platform operators and brokers which deal in virtual assets are required to report their commission income and trading profit and loss arising from virtual assets dealing.
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